Car insurance premiums to smash £700 barrier - report

Car insurance premiums to smash £700 barrier - report

Average car insurance premiums are now expected to pass the £700 barrier in the UK, according to a new report.

A study by Comparethemarket.com, reported on by Sky News, has suggested there will soon be a record breaking gulf between the average and cheapest car insurance premiums on the market, suggesting a possible fall in competition.

The gap, referred to as the savings variable, reportedly reached £118 between June and August – with the average premium standing at £697.

Should the current trend continue, the price comparison website predicts an average premium of £739 for those who automatically renew with their existing provider by the end of the year. It does, however, suggest savings can be found among those who shop around – with as much as £130 available to be saved.

“A rise in incidents such as staged car crashes, rising repair bills and insurance scams are just some of the reasons why premiums have risen as insurers look for ways to absorb increased costs,” the report states.
“The growth in the savings variable to 17%, the highest difference ever recorded, suggests competition may be falling.

“This could be in part attributed to insurers attempting to increase the profitability of their businesses.”
According to the company’s head of car insurance, Dan Bass, insurers were “not feeling any competitive pressure to reduce their prices.”

Since the referendum on 23 June 2016, there has been a lot of uncertainty in many sectors, but for the UK's insurance and long-term savings industry, the largest in the EU and third largest worldwide, the shockwaves are likely to be felt for some time